Consumption of Forecast

The case is the following: Product structure: Finished product A consists of 4 components B Forecast A is 500 Through explosion the dependent demand for B is 2000 Forecast B is 2500 (based on historical data, but includes dependent demand). AXAPTA is planning for 4500 B instead of 2500 (which included 2000 dependent demand). Is there a way to set this up??

Hmmm… Navision has the same problem.

Hi Otto I take it you are using Master Planning for this. How have you set it up? Are you using both actual and forecast scheduling? Gerrit

Hi Gerrit, indeed I am using Master Planning. For A and B I enter the Sales Forecast, but the Forecast for B should include the dependent demand from the forecast for A. Seems not possible. Otto

Hi Otto The closest to achieving this that I can think of is running the normal Master Plan and including the forecast model within the scheduling. This will then look at the forecast but also include the actual demand. You link this on you Master Plan setup window. Have a look if that will give you what you are looking for, I can’t think of anything else to try at this stage. (Nothing standard anyway?) Gerrit

This is the common problem of the 2nd level forecast. Many ERP systems had problems with this in the beginning. Given the relative young age of Axapta this is also something they will add in a later release. It is too commonly used in business to ignore. There is a customer in Scott Hamilton’s book who claims to have customized the system and has added a planning percentage field to the bom (and probably other things too) so your scenario can work. The problem is that we really need “disaggregation of forecast quantity” and not “exploded demand”, which is the only thing Axapta can do today. Call Scott Hamilton and try to find out how that customer handled this. We have the exact same problem with our customer and have not decided how to address it yet. In the standaard Axapta you can only create the forecast for A and for B independently. By creating a coverage group for Item A that has a zero time fence for explosion (or putting that zero time fence in the static plan) , the Planning engine would not explode the 400 pieces down to component B. When a sales order comes in, you would use the dynamic plan where the explosion time fence has a normal length. That would create dependent demand for B. The forecast for B would have to be manually reduced. The forecast for A could be reduced by a reduction principle. Other ERP systems allow 2nd level forecasts to be consumed by exploded demand. In Axapta only sales orders can reduce forecast… hm. I am assuming using a percent reduction principle on the component B is not going to work, of course it is a theoretical possibility.

My suggestion, looking at the Navision available functionality is to keep the Item B forecast seperate as a Part or component item. In Navision, until they resolve this issue, which is not an easy to resolve and I don’t see the solution in near future, my advise is to keep them sepeperate. If you forecast by item or by component, not both. Component should be used with combination of parent item only for Parts. Hope this will work.

In Axapta you have 2 kind of forecast sales and purchase. I think you should create sales forecast for A - 500, and purchase forecast for B - 2500. Becouse B you should buy or produce. You should mark only sales forecast on the setup of forecast plan. Forecast plan give you 2000 of B. If difference B between 2000 and 2500 is result of production proces (missing of variable scrab on item B), then you should adjust it to good value based on historical data. Then forecast plan give you 2500 of B. If you have A and B in one forecast I think sales, your forecast have doubly amount of cash. Becouse amount of cost A include amount of cost B and you add another cost of B.

Anyone knows if this issue has been resolved in AX 2009?

Thanks,

There was no issue with it in 3, 4 or 2009. you need to set your forecast reduction principle elements correctly.